Section GC 6 — Income Tax Act 2007: Purpose of rules and nature of arrangements

GC 6 Purpose of rules and nature of arrangements Purpose of rules (1) The purpose of this section and sections GC 7 to GC 14 is to substitute an arm’s length consideration in the calculation of a person’s net income if the person’s net income is reduced by the terms of a cross-border arrangement with an associated person for the acquisition or supply of goods, services, or anything else. What is a transfer pricing arrangement? (2) An arrangement is a transfer pricing arrangement if— (a) the arrangement involves the supply and acquisition of goods, services, money, other intangible property, or anything else; and (b) the supplier and acquirer are associated persons; and (c) the arrangement is a cross-border arrangement under subsection (3). When arrangement is cross-border arrangement (3) An arrangement is a cross-border arrangement if the requirements of any of the following paragraphs is met: (a) the supplier and acquirer are a New Zealand resident and non-resident, unless the requirements of both of the following subparagraphs are met: (i) the non-resident enters into the arrangement for the purposes of a business carried on by the non-resident in New Zealand through a fixed establishment in New Zealand: (ii) the New Zealand resident has not entered into the arrangement for the purposes of a business carried on by the New Zealand resident outside New Zealand: (b) the supplier and acquirer are 2 New Zealand residents and either or both enter into the arrangement for the purposes of a business carried on by the person outside New Zealand: (c) the supplier and acquirer are 2 non-residents, unless each enters into the arrangement for the purposes of a business carried on by the person in New Zealand through a fixed establishment in New Zealand. Application of sections (4) Section GC 7 , GC 8 , GC 9 , or GC 10 can apply to an arrangement under section GB 2 (Arrangements involving transfer pricing). Defined in this Act: acquisition , arrangement , associated person , fixed establishment , net income , New Zealand , New Zealand resident , non-resident , supply , transfer pricing arrangement , Compare: 2004 No 35 s GD 13(1), (2)